Hengyang Petrochemical Logistics’ 51%-owned joint venture, Jiangyin Foreversun Chemical Logistics, and Hengyang’s executive chairman, controlling shareholder and CEO Gu Wenlong has entered into a conditional sale and purchase agreement with Jiangyin Jingang Chemical Co to dispose of Jiangyin Foreversun’s entire equity interest in Jiangsu Xinheng Supply Chain Management Services to an unnamed purchaser.

Jianyin Foreversun’s interest represents 85% of the total equity interest in Jiangsu Xinheng.

The consideration for the sale stands at RMB18.1 million ($3.7 million).

Gu will dispose his 15% equity interest in Jiangsu Xinheng for RMB3.2 million ($649,185).

Jiangsu Xinheng is a company that was incorporated on April 10, 2017, in China with a registered capital of RMB20 million.

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Its scope of business includes supply chain management, freight agent, cargo stowage, and other roles.

Jiangyin Foreversun is a joint venture company that’s 51%-owned by Hengyang Holding, a wholly-owned subsidiary of Hengyang Petrochemical and 49%-owned by CITIC Port Investment Co., Ltd.

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The purchaser is a company that was established in China on May 7, 1993.

Its principal business includes the management of hazardous chemicals, sale of chemical products (excluding dangerous goods), metal materials, building materials, textile materials, machinery and equipment and electronic products.

According to a report commissioned by Jiangyin Foreversun dated Nov 4, 2020, a 100%-stake in Jiangsu Xinheng is valued at RMB21.2 million.

According to Hengyang Petrochemical, CITIC Port Investment Co is supportive of the divestment.

The gain upon completion is expected to be RMB5,592.

Based on the unaudited financial statements of the group for 9MFY2020, the net profits attributable to the sale equity is RMB1.3 million.

The book value of the sale equity is about RMB18.6 million.

Based on the management accounts of Jiangsu Xinheng as at Oct 31, 2020, the book value of the sale equity is RMB18.1 million.

Shares in Hengyang Petrochemical closed flat at 19 cents on Jan 11.